Monopoly versus R&D-integrated Duopoly

In the standard two‐stage framework of R&D/product market competition, this paper provides a performance comparison between monopoly and the cartelized research joint venture, using two well‐known models based on different versions of the R&D spillover process. According to the model with a...

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Bibliographic Details
Published in:The Manchester school 2002-01, Vol.70 (1), p.88-100
Main Authors: Amir, Rabah, Nannerup, Niels, Stepanova, Anna, Eguiazarova, Eline
Format: Article
Language:English
Subjects:
Comparative analysis
Competition
Duopoly
Economic models
Joint ventures
Market
Market strategy
Monopolies
Product development
R&D
Research & development
Research and development
Spillovers
Studies
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Summary:In the standard two‐stage framework of R&D/product market competition, this paper provides a performance comparison between monopoly and the cartelized research joint venture, using two well‐known models based on different versions of the R&D spillover process. According to the model with a wider scope of application, monopoly always leads to a higher propensity for R&D and, when R&D costs are low, to the best overall market performance. The results also allow for a comparison between the two underlying models of strategic R&D.
ISSN:1463-6786
1467-9957
DOI:10.1111/1467-9957.00285